Morning MoneyBeat: Housing’s Foundation on Shaky Ground

The looming shift in Fed policy is taking a toll on the increasingly fragile housing recovery.

Rising mortgage rates, which reflect expectations the Fed will soon reduce its stimulus programs, are proving to be a significant headwind for potential home buyers. Sales of newly built homes slumped 13.4% in July, the steepest drop in three years, and fell well below what economists were anticipating, according to government housing data released Friday.